20 December 2012

Before I begin today, a few acknowledgements. I do not believe I will change any minds with this blog post, and that’s okay. The subject discussed below has been instilled and reinforced in the DNA of many that have lived here for decades. I do not wish to offend anyone or diminish any memories of how people perceived the early years of Columbia. However, this is my humble attempt to discuss how the Columbia Park and Recreation Association (now the Columbia Association) was formed, the role of the Board of Directors and the role of the Columbia Council. Please note that I am not a lawyer and do not propose a professional legal opinion in this matter. I welcome any legal insight if anyone trained in the profession cares to weigh in. With this in mind, I base my narrative on the documents available and I hope that if I have missed something, other documents will be produced to refute my claims here. With that said, pour a virtual cup of coffee and read along.Editorial Note: Because some of the material discussed here refers back to the early years of the Columbia Association (CA), an occasional reference to the Columbia Park and Recreation Association (CPRA), Columbia’s original name, creeps in. The reader should understand that both citations (CA and CPRA) refer to the same organization.Last week I discussed an Explore Howard article that described the dramatic changes some Columbia residents would like to impose on the Columbia Association. After the article appeared online, I started asking for more information, and was directed to the Maryland Homeowners Association (Inc) website for the documents that describe the legislation.Of particular interest is the document titled “Major Benefits of Being Members of the Columbia Association (CA).” The first two bullet points in this document attempt to provide a basis for changing CA membership:

The sole purpose of the Columbia Association in its Charter is to operate “for the promotion of the common good and social welfare of the people of the community of Columbia....” The Columbia Corporation is currently organized as a nonstock corporation with no other members than the 10 persons elected by Columbia’s ten villages to the Columbia Council, an organization that currently does nothing except elect itself to the CA Board of Directors.

The Columbia Council was in theory supposed to be the voice of the residents who must pay an annual tax-like fee to CA. Now, the Columbia Council has been made virtually defunct. As to the CA Board of Directors, the CA hired staff has told the Board that their loyalty as directors should be to the staff of CA and to the Board itself, and not directly to the Columbia peoples’ common good and social welfare. Therefore, the exclusion from CA corporate membership of residents who are required to pay annual fees to CA amounts to classic ”taxation without representation.”

The unnamed author begins well enough. The Columbia Association purpose is stated well. It is also true that CA is “currently organized as a nonstock corporation,” but it always has been a nonstock corporation and no legislation considered at this time (CA, ABC or otherwise) looks to change this status.The second bullet point starts off with theory, and this is where it gets dangerous.

“The Columbia Council was in theory supposed to be the voice of the residents who must pay an annual tax-like fee to CA.”

This quote is beyond theory - it is a fallacy. The facts do not support the theory. It is something that has been repeated (probably) a million times over the last four decades. There are a lot of people that believe it a core principal of the Next American City, but it remains, at best, a myth.I have done some research on this, and what I have found contradicts this popular social mooring. The evidence I provide is from the early Columbia Park and Recreation Association Charter, Article Seven (Paragraph 3), which states:

(3) It is anticipated that as The Property is developed, incorporated community or neighborhood associations for the promotion of the welfare of residents of particular sections of The Property will be formed. Each such incorporated association, which shall meet the standards of organization and membership prescribed by the Board of Directors of this Corporation, shall have the right to elect one of the members thereof to a council, to be known as the Columbia Council, which shall be an unincorporated advisory group whose function shall be to consider and make recommendations to the associations for the benefit and welfare of the Property and the residents thereof.

Let’s take a minute to deconstruct this passage and cut through some of the Charter language. First we will clear up some definitions:The Property – the legal definition of Columbia, Maryland.Incorporated Community or Neighborhood Associations – The organizations we currently know colloquially as “Village Boards.”Corporation – The Columbia Park and Recreation Association, now known as the Columbia Association.Substituting the above definitions, the passage of the CA Charter is as follows:

(3) It is anticipated that as Columbia is developed, incorporated community or neighborhood associations (Village Boards) for the promotion of the welfare of residents of particular sections of Columbia will be formed. Each such Village Board, which shall meet the standards of organization and membership prescribed by the Board of Directors of the Columbia Association, shall have the right to elect one of the members thereof to a council, to be known as the Columbia Council, which shall be an unincorporated advisory group whose function shall be to consider and make recommendations to the Village Boards for the benefit and welfare of Columbia and the residents thereof.

And there it is, the Columbia Council was created to make recommendations to the Village Boards, not the Columbia Association. As stated in the CA Charter, the Columbia Council was an advisory group, and by the Charter they were to advise the Villages (“make recommendations to the associations”) on CA’s corporate decisions. Not advise the CA Board on resident’s wishes. Now, out of an abundance of caution, I can see how it would seem that the Columbia Council was “voice of the residents.” In addition to being “an unincorporated advisory group,” the CA Charter states that the Columbia Council members were also members of the CA Board of Directors.(A little foreshadowing here; in the history of CA, not all CA Board members were created equal. We will get to that soon enough.)As members of the CA Board, the Columbia Council attended CA Board meetings and provided their input on the CA budget, the lien assessment, capital projects and all other right and proper board agenda items. The Columbia Council also had their own meetings to discuss CA related matters. In fact, the Columbia Council met far more often than the CA Board of directors. In this structure, the Columbia Council would ultimately arrive at conclusions. They would take positions on policies and proposed projects. Much of their decision-making was based on their experience as Columbians and in this way; they were the voice of Columbians. Working within this framework year after year reinforced the romantic notion that they were the “voice of the residents.” However, until the mid-1980’s, the Columbia Council always held a minority number of votes on the CA Board. For all the interaction with residents and positions taken on behalf of residents, the Columbia Council never had any decision making power. If the CA Board of directors acquiesced to the Columbia Council position, it was because of the majority’s wisdom. Either way, it was the job of the Columbia Council to explain to the residents, through the Village Boards why CA Board outcomes happened.One final thought on the ABC legislation benefits, the author also describes a scenario in which the current CA Board of Directors is beholden only to themselves and the CA staff. This is hogwash. CA staff does provide training on nonprofit board of directors for the CA Board. It is the same standard for the CA Board as for your local elementary school PTA officers, or any other nonprofit corporation. Moreover, their proposed legislation has nothing to do with this. It would not change the duties of the Directors.Overall, I once again applaud the efforts of those that seek to improve the Coumbia Association. However, I am very concerned that much of rationale for change is misplaced and founded on strong memories, not facts. I welcome the author to sit down for a chat and we can set the record straight on this issue.

13 December 2012

Recently, Explore Howard reporter Luke Lavoie highlighted
potential legislation that would dramatically change the Columbia Association
HOA membership. According to the article, three well-intentioned members of our
community have authored the legislation.Although no specifics were provided, the article states:

A group of Columbia residents is proposing a new amendment to the Maryland Homeowners Association Act that would make all Columbia "lot owners" corporate members of the Columbia Association.
Currently, the only members of CA are the 10 members of the CA board of directors.
A lot, as defined in the HOA act, is a parcel of land within a development on which a dwelling is located.

Each of the legislation authors is provided ample quotes
regarding their perception as to why the legislation is necessary, and although
I believe that each author supports the legislation for a variety of reasons,
each seems to have a certain passion or focal point from which they speak.Maybe that is the writing or just my
perception after reading the article.In addition, the information put forth by each person is not correct.Don’t get me wrong, it is clear that
each person has done some homework.Through their quotes, it is clear that they have an understanding of the
elements involved; but it seems the edges of the truth have been blurred to
suit a certain view.

This is not to say that any of these folks are
malcontents.Although I do not
know any of the authors personally I believe them to be hard-working people who
love their family and the community. Moreover, I believe that their passion for
Columbia extends beyond their driveway.In the aggregate, good neighbors and good Columbians. In a way, their
proposed legislation is courageous. However, they are acting on incomplete
information.So in the spirit of
good Columbians, let’s try to clear the air a little bit.

Fallacy 1:The
Current CA HOA Membership Happened “by Accident”

From the Explore Howard article:

According to Ketley, it is typical for most developers of
homeowners associations to hold governing control of the organization in the
association's infancy. However, Ketley said, developers usually adopt a
"time out" approach, ceding control of the governing board to residential
lien-payers after a certain number of units are sold.

Ketley said CA is currently stuck in phase two of this
traditional three-phase "time out" process; with the third phase
culminating in the transfer of membership control to residential lien-payers.

"We don't believe there was any malicious intent when
CA was originated, we think it was just accidental that it didn't move
forward," Ketley said.

To say that it was “just accidental that it [CA] didn’t move
forward” is a slap in the face of the CA Board members that have served for the
last 25 years.Now, as with beer,
some CA Board members have been better than others, but we have had some very
smart, capable leaders in this community.Among them have been lawyers, college professors, and many other
professionals.In addition, during
the last 25 years, the subject of CA governance has come up numerous
times.It is not the case that the
subject has not come up.I can
think of at least two task forces that studied CA governance and reviewed all
of the CA documents.I have done
some research (with help from the Awesome Columbia Archives) and the transition
from the developer (HRD) to Columbia residents was deliberate and clearly
spelled out.It was not accident.

"We are not asking for something that will make us
stand out or different," said group representative and Oakland Mills
resident Bill McCormack. "In fact, CA, as it is structured now, stands out
and is different. In this case, we want to be like everybody else and adopt a
structure that is tried, tested and true."

"When we are supporting CA through the lien fee, we
need to have representation. That's critical, that is how we do things in
America."

And…

McCormack said the bill would increase communication lines
and connectivity between the CA board and residential lien-payers.

"By making a lien-payer a member, it completes the loop
and brings Columbia closer together," McCormack said. "Because we
lien-payers are not members, the board is disconnected from us. If our
legislation goes through, the CA staff is working for us, because we are the
members and owners of CA."

I think of all the people involved in creating this
legislation, most residents can identify with Mr. McCormack’s remarks.One of the most commonly stated reasons
for changing any Homeowner Association has been based on “fairness” and “this
is America.”In fact, Mr.
McCormack has written letters to the editor on the subject before.

With regret, I have to inform Mr. McCormack that the
Homeowner Association structure is not intended to mimic governmental
elections.It is instead geared
toward stockholder elections for publicly traded corporations.There has been a lot written about
homeowner associations in the last thirty years.Most of the writing warns of the dangers of “private
government.”None of the writing
characterizes HOA’s as “aspiring to Jeffersonian Democracy” through private
means.

I would also advise Mr. McCormack to revisit what he is
trying to accomplish and what this legislation actually says. Current voting
membership allows Columbian lot owners and renters to vote in HOA elections
(with Kings Contrivance and River Hill being the exception – all lot owners and
residents over 18 can vote there). It is also important to note that implicit
in the voting structure is the fact that people who own multiple lots have
multiple votes.In addition, if
more than one person holds title to a single lot, they have to agree and vote
once.So there are some inequities
built into the current system.

The legislation that Mr. McCormack offers reduces the voting
population to lot owners.Renters
would be frozen out of the process.Corporations would be frozen out of the process.And the inequities stated above would
continue.The effect of this would
be to magnify the representation of multiple lot owners and would
disenfranchise the votes of thousands of Columbians.If “being more like America” was the intent, this
legislation goes in the opposite direction.

It is through the election of Village Boards and Columbia
Council Representatives that CA residents achieve representation.In the Village of Oakland Mills, this
occurs during the month of April every single year.The bottom line is that there is a process for residents to
be connected to CA.They just have
to participate to do it.Moreover,
CA provides a number of surrogate opportunities to connect with the Columbia
Association.Residents are
encouraged to attend and speak at all CA Board and Committee meetings.CA has set up a number of advisory
committees, constituted of residents, to advise on policies big and small.In short, the amount of
participation is limited not by CA, but by a resident’s desire to participate.

Lastly, the second theme in Mr. McCormack’s quotes emphasize
that CA should “be like everyone else.”However, he does not cite examples (and to be fair, they may have been
left out of the article).If there
is in fact a better way, I would like to see some case studies before this
legislation goes to Annapolis.I
have no illusion that CA is without flaw; there are some things that I really
don’t like about the organization.On the other hand, I do think that they do many things well.If “everyone else” is doing it better
than CA, show me the data.I
strongly suspect that there are a number of HOA’s that don’t do as good a job
as CA, and the remaining ones are at best marginally better than CA.Said a different way, the top
performing (whatever that means) HOA’s in Maryland may be a little better than
CA at certain metrics (whatever they are), but the differences are so small
that they do not justify completely altering the membership of the
organization.

Fallacy 3: The Proposed Legislation will Create a New
England Style, Alexis de Tocqueville Town Hall where Citizens Directly Vote on
Budgets and Issues

From the Explore Howard article:

According to ABC member Joel Pearlman, under HOA law
corporate members are required to have one annual meeting, at which the members
can vote on polarizing issues like amendments to governing documents and
considerations for the annual budget.

"All we are looking to do is make minimal changes to
allow (the residential lien-payers) to have one public meeting a year to decide
on which issues are important," Pearlman said. "Whatever it is in the
future people think is important enough to deal with, this would give them a
forum to do that."

Pearlman said the changes are meant to affect the political
structure of the organization, not the legal structure, meaning the CA board
would not be legally bound to honor recommendations or votes by the
lien-payers.

My concern with Mr. Pearlman’s remarks is his misreading of
the Maryland Homeowners Association Act.With respect to meetings, Section 11B-111 states (in part) the following
(emphasis mine):

§ 11B-111. Meetings of homeowners association or its
governing body
Except as provided in this title, and
notwithstanding anything contained in any of the documents of the homeowners
association:

(1) Subject to the provisions of item
(4) of this section, all meetings of the homeowners association, including
meetings of the board of directors or other governing body of the homeowners
association or a committee of the homeowners association, shall be open to all
members of the homeowners association or their agents;

(2) All members of the homeowners
association shall be given reasonable notice of all regularly scheduled open
meetings of the homeowners association;

(3) (i) This item does not apply to
any meeting of a governing body that occurs at any time before the lot owners,
other than the developer, have a majority of votes in the homeowners
association, as provided in the declaration;

(ii) Subject to
item (iii) of this item and to reasonable rules adopted by a governing body, a
governing body shall provide a designated period of time during a meeting to
allow lot owners an opportunity to comment on any matter relating to the
homeowners association;

(iii) During a
meeting at which the agenda is limited to specific topics or at a special
meeting, the lot owners' comments may be limited to the topics listed on the
meeting agenda; and

(iv) The governing
body shall convene at least one meeting each year at which the agenda is open
to any matter relating to the homeowners association;

As stated in 11B-111.(3).iv, the governing body shall have
one meeting with an open agenda such that anyone can speak about anything.This is much different that having a
quorum to vote on items.I have to
give credit to Mr. Pearlman’s aspirations.His reading of the Homeowners Association Act is much closer
to the classic Alexis deTocqueville passage on New England towns:"In towns it is impossible to
prevent men from assembling, getting excited together and forming sudden
passionate resolves. Towns are like great meeting houses with all the
inhabitants as members. In them the people wield immense influence over their
magistrates and often carry their desires into execution without
intermediaries."

This type of participatory democracy is an ideal with great
allure.However, there is little
evidence that changing the Homeowners Association Act would cause it to
happen.The data we currently have
on public participation indicates the opposite.Columbia elections are held every April and have settled
into a pattern.Most villages see
about 10% turnout and many of the Columbia Council races go uncontested.During the remainder of the year the
number of people moved to attend meetings and participate can be measured in the
dozens. It is difficult to see a groundswell of participation down the road if
current participation levels continue to remain weak.

In closing, the authors of this new legislation should be
commended for their efforts.However, they have provided little evidence as to why this change needs
to occur.Their conclusions have
yet to be supported by evidence of a better way.I hope any individual elected to the State Legislator would
require much more details from these individuals before taking it to
Annapolis.Although the authors
claim the proposed legislation will result in “minimal changes,” you have to
consider the changes would affect more than 30,000 lots (and even more voters). HoCoBlogs@@@

12 December 2012

In my last post, I asked for the Columbia residents that are
proposing legislation to fundamentally change Columbia Association membership
to make their views public.They
have posted their proposal on the Maryland Homeowners Association, Inc
website.To facilitate discussion,
I will repost their work here.I
have some thoughts on this, but would prefer to allow for discussion
beforehand.Please note that the
posting of information below is in no way an endorsement of the language
provided.Take a look and let me
know your thoughts:

First Document:

Rationale and Major Benefits of Being Members of the
Columbia Association (CA)

The sole purpose of the Columbia Association in its Charter
is to operate “for the promotion of the common good and social welfare of the
people of the community of Columbia....” The Columbia Corporation is currently
organized as a nonstock corporation with no other members than the 10 persons
elected by Columbia’s ten villages to the Columbia Council, an organization
that currently does nothing except elect itself to the CA Board of Directors.

The Columbia Council was in theory supposed to be the voice
of the residents who must pay an annual tax-like fee to CA. Now, the Columbia
Council has been made virtually defunct. As to the CA Board of Directors, the
CA hired staff has told the Board that their loyalty as directors should be to
the staff of CA and to the Board itself, and not directly to the Columbia
peoples’ common good and social welfare. Therefore, the exclusion from CA
corporate membership of residents who are required to pay annual fees to CA
amounts to classic ”taxation without representation.”

This legislation would give the following major benefits to
Columbia lot owners:

The ability to meet as members and have a stronger voice on
issues involving how CA operates and collects and spends the money it receives
from members, such as CA’s budget, issuance of debt, changes in the annual
charge CA imposes, and any broad policy question affecting members.

The right to attain fundamental rights, such as ensuring
accountability and transparency within CA, that are normally available to
members of other homeowners associations in Maryland and that are specifically
granted to members by CA’s governing documents.

The opportunity to amend CA’s governing documents as
required to serve the residents of Columbia.

The effective date of this legislation could be moved to
October 1, 2014, to permit ample opportunity for the Columbia Association to
accommodate the expanded membership structure.

Second Document:

PROPOSED AMENDMENTS TO TWO SECTIONS OF THE MARYLAND
HOMEOWNERS ASSOCIATION ACT TO ADD LOT OWNER PROTECTIONS AND TO CLARIFY
DEFINITIONS OF SIMILAR TERMS: “MEMBERS” and “CORPORATE MEMBERS”

§ 11B-113.6Additional protections for lot owners

a) Legislative intent. -- It is the intent of the General
Assembly to provide additional protections to lot owners subject to this Act in
homeowners associations organized as nonstock corporations in which not all lot
owners are corporate members.The
section would grant corporate membership to any lot owner excluded from such
membership.As corporate members,
these lot owners would have the ability to further expand upon the rights
provided by this Act.

b) Definition of corporate member. -- In this section, a “corporate member” is defined by the
provisions of Title 5, subtitle 2, of the Maryland Corporations and
Associations Code.

c)Additional
lot owner protections. -- Any Maryland homeowners association organized as a
nonstock corporation that does not automatically include all lot owners as
corporate members shall add immediately all excluded lot owners as such
corporate members with all rights provided by the corporation’s governing
documents and Maryland law.

§ 11B-101(i)(3) A “member” of a homeowners association is
any lot owner and any other person that the homeownersassociation may wish to designate.

AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2014.

04 December 2012

A recent article on the Explore Howard website reveals that three Columbia residents are seeking to introduce legislation at the Maryland State level to dramatically change Columbia Association HOA membership. Given that these residents have advocated for greater transparency and seek to stop CA's proposed legislation, I ask that these individuals release their proposal to all Columbia residents as soon as possible. This document must be given to Columbians now rather than after it appears in the General Assembly so that residents clearly understand the intent and depth of their proposal. To do any less would shrink from the transparency they seek of others. With all due respect, demonstrate your beliefs in deeds and not only in words. HoCoBlogs@@@

04 June 2012

Columbia Association is changing. Yes, CA has been rolling out big picture things like new golf clubhouses, new people tree logos, and more lake dredging (yes!) . However, I think a a lot of the small things they are doing will have, over the long run, an even bigger impact.

Consider downtown Columbia lakefront activities. Yes, the festival of the arts banners are up (just as the Wine in the Woods banners came down), and they will in turn be replaced by the Columbia Boat Float and International Day banners. They help. Yes, CA publishes the family movie nights in their CA Monthly. This helps too, but I can never seem to find it when I need it.

I recently came across the lakefront activities calendar here, and a link to download the activities into either an iCal (Apple) and Google Calendar (duh) application (check lower right-hand-side of webpage). Many of parents-of-children-in-HCPSS already use a similar download for the school year calendar.

This means that I can access the movies and concerts from the desktop, laptop or smart phone. I can also set alerts for movies the family definitely wants to see (cue The Muppets, 23JUL12 and Pirates of the Caribbean - On Stranger Tides, 03AUG12).

The effect is a helpful pocket reminder of things we want to see. I hope to see you all there too. HoCoBlogs@@@

Disclaimer

Just a quick note. My posts on this blog are my own personal thoughts and are not intended to reflect the views or opinions of the Wilde Lake Community Association, it's members, staff, or Board of Directors.